Confidential Information: The Employee's Obligation towards the Policy - Essay Example

Running Head: INFORMATION POLICY Information Policy s Information Policy Define Confidential Information Confidential Information Confidential Information" can be defined as any technical, financial, or business information or materials regarding the business an organization that is disclosed or given by the organization to Confidant, or that is taken from such information or materials. Confidential Information maybe disclosed in verbally in writing, visually, digitally, electronically, or physical form by the authorization of the organization. The unauthorized disclosure of information will humiliate, hurt or prejudice the organization. Such information does not reach the in the public domain, until it is communicated by unauthorized means, or unless by the organization s policy permits such disclosure which is stated in the Public Disclosures Act 1998 (Anderman 1998 p15). All report, documents and information that are confidential that are made or gained during employment will be the sole property of the organization and has to be submitted back to the organization at the time of termination or resignation. Kinds of unconfidential information are as follows: Unpublished computer code Product design definitions and specifications Product development agreements and other related agreements. Business plans Financial projections Marketing plans Sales data Unpublished promotional material Cost and pricing information Customer lists, and Pending patent applications What Are The Employees Obligation Towards The Policy Every employee has a long-lasting obligation towards the policy to protect confidential information. The obligations which the employee has are given below: Employee ought to realize that in during his/her employment with the organization; the Employee might get authorized access to or unintentionally come across "confidential information." As utilized in the Confidentiality Agreement, "confidential information" is the similar to "protected health information. These are even known as the Trade Secrets. Therefore, as a clause of employment and in concern of Employee's right to utilize the confidential information of organization, Employee has the following obligations: Employee has an obligation to withhold the confidential information of the organization in strict confidence as well as not to reveal or otherwise use this confidential information apart from when this information plays an essential role in the Employee's regular job responsibilities. This indicates, amongst all things, that: Employee will have an obligation only to access confidential information only when he needs it for legitimate business. Employee has an obligation to not disclose, reveal, copy, make public, trade, lend, assess, change or wipe out any confidential information of the organization only when the employee completely authorized by the organization; and Employee has an obligation not to misuse or steal the accessed confidential information. Employee's further obligation is to stop unauthorized utilization of confidential information and he is also obligated to the policy to complain about any unauthorized utilization of confidential information to the Privacy Officer of the organization. The Employee has an obligation not to get rid of any record of clients (as well as the copies of the records ), or any other kind of confidential information, thus the Employee is obligated to the policy by not getting rid of any original record s of clients from property of the organization's if he has no past permission by the supervisor. Employee has an obligation not reveal his or her network computer password to anybody, or permit anybody to access or change information in the Employee's identity. Employee realizes that the trade secrets have to be kept confidential both in as well as outside the organization where he works and so he must talk about the trade secrets with every individual or organization as they do not always have an official business reason to have the right to use to this information (Howard & Jerome 1999 p 36). Employees may acquire confidential information during his or her normal job activities or from other employees. This confidential information must not be repeated to anyone, inside or outside the company that are not authorized to receive information. For example, no employee may reveal to outsiders confidential data such as trade secrets, processes, policy and procedure manuals, marketing plans, sales information, customer lists or information, pricing information or financial data unless the performance of his or her job requires the disclosure of such information, nor may a former employee use or disclose such confidential information after his or her employment with the Company has ended. Each party agrees that all confidential and proprietary information, materials, samples, ideas, documentation and data, including without limitation formulations, specifications, methods of processing and production and marketing, planning and sales information, provided by the disclosing party or acquired by the receiving party from the disclosing party, including any information provided before the execution of this agreement, and all copies thereof (hereinafter collectively referred to as "Confidential Information"), is the disclosing party's confidential and proprietary property and shall be held in strictest assurance via the receiving party. The nature and contents of the Confidential Information shall not be disclosed or used by the receiving party except as provided herein without the prior written permission of an officer of the disclosing party. Each party agrees that all information, data, ideas, improvements, inventions and discoveries developed, conceived of or reduced to practice by the receiving party which are derived from or based upon the disclosing party's Confidential Information shall also be exclusively the disclosing party's property and Confidential Information. Each party further agrees that it will disclose the other's Confidential Information only to such of its employees who have a need to know the Confidential Information in order to carry out its responsibilities as directed by the disclosing party and then only to employees who have been advised of the confidential nature of the Confidential Information and have agreed to accept the same obligations as the receiving party has hereby accepted. Upon the demand of the disclosing party, the receiving party shall return all of the disclosing party's Confidential Information to the disclosing party and shall retain no copy thereof. The parties also identify and agree that nothing which this Agreement consists may be construed as granting it to receiving end any privileges by means of license or otherwise, express or implied, to the disclosing party's Confidential Information, or as constituting a contract, commitment or order by either party for the purchase or development of any items. Each party accepts that its violation of any of the promise and agreement put forth herein will consist of material as well as unfavorable outcome on the other and the harm from violations like this might be hard to determine. Therefore, each party concurs that, in addition to and exclusive of restricting any other solution or privilege which the non breaching party might have, the non breaching party will have the right to ask for an injunction which is temporary as well as permanent enjoining a violation like this. The obligations of the parties under this Agreement shall expire (5) five years after the effective date of this Agreement. This Agreement can not be modified except for in writing signed via an representative of both parties (www.can.org/files/ResourceParticipationPacket). It will be managed by as well as interpreted according to the laws of the State. This Agreement supersedes any prior non-disclosure or confidentiality agreement(s) between the parties relating to the Confidential Information and such prior agreement(s) are hereby terminated. The confidante must receive the information in confidence. That means that he or she must be asked to treat the information as confidential or it must be obvious to him or her that the information is given in confidence. The best way to do that is to ask the confidante to sign a confidentiality agreement. That is not in itself enough. Precautions must be taken (and seen to be taken) to keep the information secret such as logging documents and disclosures, keeping materials under lock and key and extracting confidentiality agreements. Merely inserting a confidentiality clause into a contract of employment may not always be enough (http://www.ipit-update.com/conf.htm). Should the Employee's Obligations Under This Policy Continue After Termination Of Employment And What Measures should be taken That It Is Ensured That They Oblige the Policy A company is always at risk when a contract comes to an end and might be disadvantaged commercially as well as financially via the actions of an ex- employee. On the whole examples generally involve former staff stealing clients or important employees by showing them the many benefits of the competitor (Shrubsall 1989 p24). The best means to end this is by protecting a post-employment restraint to stop any direct effort to take away clients or staff, or to challenge the business. A restraint clause may permit the organization a "grace period" after an employee has resigned, in that period the organization can protect its interests for instance, make new contacts of sales (Hugh 2003 p34). Clauses like these usually ban a former employee from takeing part in competition which is direct or steeling clients as well as staff for a known period after resigning. Nevertheless, it is vital to keep in mind that the courts have usually been hesitant to support these clauses. This is because they are frequently considered to be in opposition to public policy by limiting someone from practising his or her business and earning a living. Thus, for restraint clauses like this to be followed, the employer usually has to proof that there is a considerable need to safe guard genuine business interests. In order to make a decision on this, factors taken into consideration will comprise of the seniority of the employee, the kind of the work, as well as the industry it belongs to. Employers looking to enforce a post-employment restraint must make sure it is cautiously drafted as well as that it is restricted in scope to what is extremely necessary. If the organization does this, there may be a better possibility of it being supported by any court, if a disagreement does occur. Immediate recourse like this is generally likely only by means of the temporary injunction procedure, by which a court gives orders to the former employee to give back the information or avoid disclosing it. So that the process can be introduced, the employer needs to be capable enough to claim that the ex- employee is in contravention of an obligation not to reveal or hold the information. A lot of employers think that they may not be able to get injunctive relief unless there is apart of noncompete agreement that has been executed by the employee. Due to this a number of employers now regularly need all employees to put their signatures on agreements like this, despite of the real competitive or confidentiality apprehension related with that specific employee or her place. Such global utilization of noncompetes is not at all times a cautious employment exercise. Noncompete agreements usually forbid former employees from getting jobs in specific industries in a particular geographic region, or doing business or with certain clients, for a specific time period. The end result of a noncompete is to stop a ex- employee from doing business or getting a job in a certain field, or working for certain units. What Are the Other Ways of Protecting Confidential Information In a normal business it is sometimes necessary to share a secret with another company. A manufacturer may need to have specialised tests carried out on a prototype, and does not want competitors to know details of the new product. An assembly company may wish to know if a supplier can meet a new, tough specification which will give a quick market advantage, but does not want anyone else to use the same specification. In both of these examples the prototype and the new specification must pass out of the owner's hands, but the owner will of course wish to retain control (http://www.wipo.int/sme/en/documents/disclosing_inf.htm). Measures of keeping the secret will ensure favourable decision of the judge if the violation was proved. As the development of stated above, the following are considered security measures for keeping trade secrets: Using Nondisclosure Agreements Maintaining of physical security (clean desk, locked cabinets and drawers etc) Computer security (file protection, password policy, data encryption and etc) Labelling of certain information as Confidential Limit employee access to trade secrets Document access log Restricted photocopying Destroying of documents that contain sensitive information Using of Noncompete Agreement Screening of employee presentation and publications Controlling visitors Screening of new employees Dealing with leaving employee Hiring of new employees and leaving employees is most concern involved with trade secrets. New employee, if the one is from competing company, could be the reason for suit by competitor if during an employment period that employee could use knowledge and skills which were trade secrets of competing company. A protection against suit could be enforced if nondisclosure agreement was signed at the time of the interview which specifically would stipulate that no trade secrets of current and former employer to be disclosed by hired employee. Former employees are considered main source of trade secrets leak. Statistically it is proven fact that disgruntled employee are most likely to harm a company by disclosing trade secrets. The best method of all is a NDA. Basic Nondisclosure Agreement comprised of several sections, which specifies subjects of the agreement (usually two parties), definitions of confidential information, exclusion from confidential information, obligations of receiving party, time periods the agreement is in effect, severability and etc. Severability implies that if the court finds that any part of the agreement is not in compliance with the law, then only that part will be cut from the agreement while leaving the rest as effective. Otherwise according to the law the whole document can be found discharged if any part was not in compliance. Besides all, the NDA must be signed by both parties in order to have a legal power. Some other provisions added such as Injunctive Relief, Indemnity, Attorney fees, Arbitration and Mediation, which state laws will govern disputes, Jurisdiction and other are intended to fortify agreement, tying up potential perpetrator of the agreement with maximum burdens. The trade secrets created by employee sometimes create confusion about the ownership of the secrets. Most of the laws provide that any secrets created on employee's time, but without employees materials are considered company's property. In order to fortify that provision employers need specifically add the clause where ownership of trade secrets is clearly indicated. NDA does not guarantee an automatic protection from disclosing of trade secrets by breaching the agreement party. A breach in agreement forces suffered party to hire lawyers and file a lawsuit, which sometimes could take significant financial resources. Even though, yet certain procedures are required to follow in order to get trade secrets protected by law. The majority of the laws that safe guard trade secrets are based on the Uniform Trade Secrets Act (UTSA). It was written in 1970 and Minnesota was the first state that enacted it in 1981. Currently 38 states enacted UTSA including District of Columbia. The UTSA was enacted in Florida as well and it refers to the Chapter 688 of the Florida Statutes. Misuse as well as theft of trade secrets has usually been impeached in state laws, as being a civil as well as criminal offense. Through the endorsement of the Economic Espionage Act of 1996, trade secret has been given federal security of intellectual property. The main center of attention of the Economic Espionage Act of 1996 is not foreign entities 's espionage or thievery, however it involves trade secrets 's misappropriation or theft by citizens of the United States (Kate & Selwyn 1999 p 45). Think that once you hear information from a source that it is hard to ignore it. I think it is human nature to want to investigate the information to find out if it is true. Also, I think that it is hard not share confidential information with friends or family members. It takes self discipline to keep information confidential especially if you hear rumors that are not true. The company I work for has a system for identifying the level of sensitivity of information shared with employees. I have no problem keeping this type of information confidential. In my personal matters of the heart are where I am most likely to share information Sometimes it is in the best interest of the other party involved to informed of confidential information. It feels more like lying when you deny knowing information to friends or family. How Will the Policy Effect the Organization In The Long Run A review confidential policy in most business environments is an inalienable element in the employee hiring process. Approximately all businesses have some valuable confidential information which desires to be kept a trade secret. It might be a sales plan, an inventory of customers, a procedure for manufacturing or some kind of formula for its product (John 1991 p 50). This confidential information is a type of property whose worth would be nothing if competitors get hold of it. In order for an to be effective it has to be tailored according to the legislative acts, otherwise an employee who breaches the contract could be freed of any charges, and continue to share trade secret to the satisfaction of the competitor. The Confidential information policy is an important means to protect business confidential information. The party who is in violation of an NDA agreement could be sued for the wrongful act and require compensating the plaintiff financially for all the damages done. In addition, the court usually issues an order that prohibits further disclosure of secrets. The Confidential information policy is not only serving as a protective tool, but it also encapsulates other benefits: It conveys to the party receiving the information notice that all information is sought to be treated as confidential. It clearly highlights what information is treated as confidential in order to avoid any misunderstanding and disputes. It stipulates the way of resolving disputes either by court or arbitrage. The jurisdiction of the dispute Which laws will be predominant or applicable in resolving disputes; The time required for a lawsuit. Hiring of new employees and leaving employees is most concern involved with trade secrets. New employee, if the one is from competing company, could be the reason for suit by competitor if during an employment period that employee could use knowledge and skills which were trade secrets of competing company. A protection against suit could be enforced if nondisclosure agreement was signed at the time of the interview which specifically would stipulate that no trade secrets of current and former employer to be disclosed by hired employee. Former employees are considered main source of trade secrets leak. Statistically it is proven fact that disgruntled employee are most likely to harm a company by disclosing trade secrets. Conclusion The confidential information policy is an extremely important for an organization thus is very necessary that the employees must be restricted to access of customers' certain information until the employee's job requires him to have knowledge of this information. Each and every employee should be educated so that they will realize that the customer privacy and confidentiality hold great significance . Because of the significance of the matter, every employee should be accountable for keeping up the privacy of consumer information, and if an employee violates the principles of privacy then the employee should be subject to suitable disciplinary actions. References Anderman, S (1998); Labour Law: Management Decisions and Workers' Rights. 3rd Ed. London: Butterworths, p 15 Howard A. Ellins & Jerome G. Snider (1999) , Corporate Privileges and Confidential Information ALM Publishing UK p36 http://www.ipit-update.com/conf.htm retrieved on June 3, 2008 http://www.wipo.int/sme/en/documents/disclosing_inf.htm retrieved on June 3, 2008 Hugh Secord (2003) ; Implementing Best Practices in Human Resources Management, CCH, Toronto p34 John M. Carroll (1991) ; Confidential Information Sources, Second Edition: Public and Private, Butterworth-Heinemann; 2 edition p50 Kate Brearley & Selwyn Bloch (1999); Employment Covenants and Confidential Information , LexisNexis UK; 2Rev Ed edition p45 Shrubsall, V (1989);. Contracts of Employment. Wiley, John & Sons p 24. www.can.org/files/ResourceParticipationPacket retrieved on June 3, 2008 Appendix Confidential Information Policy 1. the employee will be permitted hold confidential or proprietary information or trade secrets ("confidential information") in trust as well as confidence and agree that it shall be utilized only for the reasons relating to the job responsibility of the employee , he / she shall use the information for anything else , or disclosed to any third party. 2. No copies shall be made or kept of any written information by the employee or samples supplied without consent. 3. On resignation or termination the employee will have to return all confidential information. 4. No Confidential information will not be not be disclosed to any employee, consultant or third party unless they agree to a sign an agreement 5. This policy as well as its validity, construction and result shall be administered by the law. Read More